Sources claim that an announcement could be made as soon as next week, although another warned that talks could still break down at this stage.

Vodafone's Chief Executive Vittorio Colao has made it clear that they would only sell at the right time and the right price. In a statement the company confirmed discussions, but stressed there was "no certainty that an agreement will be reached".

Verizon has been trying to buy Vodafone's 45% stake for some time, but rising interest rates, tougher competition and Verizon's share price have pushed the company to accelerate talks before a deal becomes too expensive.

Vodafone almost sold its stake in 2004 by bidding for rival company AT&T Wireless. Had it been successful, the British telecom provider would have sold its Verizon shares, but as it lost out, it decided to stick with Verizon to maintain its presence in the US market.